Are there currently any markets for BRRRR properties

Question

Let's say you're looking for the following:

Purchase price = $75,000

Rehab cost = $25,000

ARV = $150,000

In what market is this kind of a deal likely to happen today?

Anthony McEvoy · Answer

Hello @Sam Bhattacharya - honestly, they're in many markets.  However, in today's environment, most are going to be found off market via methods such as mailers and networking.  Check foreclosure listings and sheriff sales, too.

Another way is to look for listings that aren't as obvious as a house in bad condition you can add value to.  Such as a two bedroom house that can easily be converted into a three bedroom.  Perhaps an unfinished basement that could be finished for another bedroom and bathroom.

I viewed a house over the summer that was two bedrooms because someone knocked down a wall in the third bedroom for a larger family room.  I recognized the opportunity because the square footage of the house seemed large for only two bedrooms for the area.

Best of luck!

Dave Poeppelmeier · Answer

@Sam Bhattacharya I agree with @Matthew Crivelli, you can find many houses for under $100k in decent neighborhoods in Toledo, especially ones that need work. Here's the thing though: everybody wants a BRRRR. But how are you going to Rehab it out of state? Try to find a contractor that won't gouge you the second they learn you're not local, or let a PM do it for a markup? Also, to get that kind of "Perfect" BRRRR is really difficult to do. There are investors in every market that have their mail/cold call teams working to find these perfect deals off-market, and many of them are local. Realtors typically won't help with that, because it's simply not what they do.

Now, since rates have gone up and the market is skidding to a major slowdown, the opportunity is getting better, even on the MLS as people who have to sell don't have 14 offers coming at them for anything that has 4 walls and a roof. If you don't want to do a mail/cold call campaign, you can find houses on the MLS that you can buy for $70k, put the $10-15k into it, and it will be worth $80-90k pretty easily, so you can get some of your money back. But to find the Home Run in your example on the MLS is really difficult. The biggest thing though is to get going doing something. If you can get into a nice, fixed up rental property and have minimal money in the project in the end, that's still a win. It all depends on how you want to proceed. Let me know if you have any other questions about Toledo, and best of luck to you!

Bob Stevens · Answer

Yes 100kish all in value about 120 -130k, rent 1200- 1400, In the Cleveland markets. Heck, I got two last month, all in 60k, rent 1400, value about 125k, All in 63k, rent 1200 value about 75- 80k,,,, I get them all the time.

Raymond Reyes · Answer

Yes, a smart investor friendly agent would, especially in those markets since the money is in the volume. Also, once you fix it up you'll need to sell it, so if the agent served you well the first time chances are you'll bring him on to sell and then to buy your next one. Is that to say that there's agents that will not give you the proper service because of the price? Of course. That's why it's important to make sure you vet and find the right realtor for what you're trying to do. Let them know your criteria and what you're trying to do and they should take care of you.

Matthew Crivelli · Answer

@Sam Bhattacharya

Ohio my friend - the large markets in the state are still zooming and you can pick up housings for under 100k.

Rob Bergeron · Answer

I connect with my clients with wholesale deals.

Anthony McEvoy · Answer

Wholesaling is a form of investing.  It is short term investing... often real short term.

Wholesalers and BRRRR Investors are seeking similar types of properties... properties at a discount.  Wholesalers are seeking properties they can purchase at a discount while providing the "easy button" for the seller.  It may not always be the condition of the property but the ability for the buyer to pay with cash, close quick, etc.  BRRRR investors are looking for properties that are in physical distress (needing rehab) or have characteristics that are lagging behind the neighbor demands (i.e. too few beds/baths).  Therefore, their property searching results in properties they can get at a discount compared to the after repair value (ARV).

Obviously, the end game is different with the wholesaler trying to resell it closer to market value while the BRRRR Investor is looking to refinance and hold.

I do not think the line is becoming blurry.  I think there is more overlap with some types of investing compared to others.

James Wise · Answer

None....Only way that deal would work is if the house you bought for $75k was really worth $100k+ but the seller didn't realize it. That happening isn't really a market thing so much as a marketing thing. You would need a massive marketing budget and the time and resources to talk with 1,000's of sellers before hitting big on a deal like that.

Anthony L Amos Jr · Answer

Toledo, OH

Sam Bhattacharya · Answer

That's what I got from reading your posts in another thread.

25k rehab costs may be a case of TGTBT.

Are there currently any markets for BRRRR properties < $100,000?

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